buying property in calif.

[john cullen]

can anyone advise on the costs/pitfalls of buying property in the u s? i hope to move there in 2/3 years and at this time do not have residency permit and live in the u k as a citizen. i have found property i wish to buy for around $300k and would like to start the buying process.

[Fatbrit]

There are no restrictions on foreigners buying US property. However, from a tax point of view there are a number of disadvantages, and these will exist up to and until your become a US citizen. Look up CGT liability and taxation at death on the IRS.gov site. In addition, for some states (Florida, for example) you will pay a heavier burden in property tax as an alien.

Note that buying a property gives you no right to live in the US. If you are of retirement age, you could possibly apply for a B2 visa as a "snowbird" and spend up to 180 days in. However without this, the VWP only offers 90 days. Using these visas, you should spend at least as much time out as you do in, and even then there is no guarantee of entry. It should also be noted that spending 180 or more days in the US will mean that the IRS consider you a resident for tax purposes, even if USCIS do not.

Beyond that, there are various visas which would allow you to spend a longer time here. Generally, they involve $$$.

[Rachel_Heath]

John,

Currently there are no 'retirement visa's' available for the US - although I seem to remember someone once a few years back trying to push a bill through to create one so in the meantime your options as Fatbrit mentioned are somewhat limited.

A B2 visa is long stay tourist visa; however you'll need to demonstrate ample proof that you have no intention of attempting to emigrate to the US.

The only other visa's that would be seemingly worthwhile would be work or study related so I'm not sure how well they'd fit in with your retirement plans.

A B2 technically would allow you to stay for up to a year at a time however there are tax consequences that will kick in after ~180 days with both HMR&C and the IRS.

[Fatbrit]

Originally Posted by Rachel_Heath

Currently there are no 'retirement visa's' available for the US - although I seem to remember someone once a few years back trying to push a bill through to create one so in the meantime your options as Fatbrit mentioned are somewhat limited.

I suppose if anything the EB5 is the "retirement visa" -- 0.5M USD down and you get a green card. However, the program sunsets this fall if not extended by Congress and is definitely a caveat emptor proposition.

Beyond the visa difficulties, there are also those of health care for the over 65s. Emigrants will not qualify for Medicare without 10 years of social security contributions. They can buy into it, but only after 5 years of residency. And US health care can quite quickly and happily shrink even the largest wallet. Sometimes there is salvation in State health care plans. But it must be the biggest consideration after the visa for those seeking retirement here.

[twostep]

You may want to read up on EB5.
Immigration through Investment

[john cullen]

thank you guys for the useful info, it is a site [lot] im thinking of buying and wonder if there are any tax implications of buying whilst not u.s. resident. i fully appreciate this is not some kind of entitlement to a permit which i am hoping to acquire on endorsement from a close relative.

[Rachel_Heath]

Originally Posted by john cullen

thank you guys for the useful info, it is a site [lot] im thinking of buying and wonder if there are any tax implications of buying whilst not u.s. resident. i fully appreciate this is not some kind of entitlement to a permit which i am hoping to acquire on endorsement from a close relative.

By this can we assume that you're thinking that this 'close relative' will be able to sponsor you for a green card?

If so then you need to be aware that unless your immediately related. As per the USCIS "Immigration through a Family Member" the sponsor (if a US Citizen) can sponsor only the following:

• Husband or wife
• Unmarried child under 21 years of age
• Unmarried son or daughter over 21
• Married son or daughter of any age
• Brother or sister, if the sponsor is at least 21 years old, or
• Parent, if the sponsor is at least 21 years old.

A lawful resident can only sponsor either

• Husband or wife, or
• Unmarried son or daughter of any age.

[Bevdeforges]

As far as tax implications are concerned, you will be responsible for local property taxes on the property, but other than that, not too much else. The usual caveats apply - make sure the property is zoned for the use you want to put it to and that all the appropriate utility connections are available. Depending on where the property is located, you may be held responsible for making sure the property is kept mowed or otherwise tended in your absence. (Some towns have laws against allowing "noxious weeds" to proliferate if they might spread to the lawns in the neighborhood.)

And, some banks or other financing sources will limit the term of any loans they are willing to make on the property to the duration of your visa to remain in the US.
Cheers,
Bev

[Fatbrit]

Originally Posted by john cullen

thank you guys for the useful info, it is a site [lot] im thinking of buying and wonder if there are any tax implications of buying whilst not u.s. resident. i fully appreciate this is not some kind of entitlement to a permit which i am hoping to acquire on endorsement from a close relative.

Property tax is usually the preserve of the county. There is sometimes a penalty for being non-resident. Search using the county where the property will be located.

At the federal level, search for FIRPTA withholding (Foreign Investment in Real Property Tax Act), and the IRS treatment of non-resident aliens for capital gains and death purposes.

[synthia]

Also, if you rent out the property for the time you aren't in the US, you will then have US income and be required to file a tax return. If you use the property for more than a couple of weeks a year, that affects whether you can deduct rental expenses. It's complicated, I think.